Bitcoin launched in 2009 as the first decentralized peer-to-peer currency. Today, it’s the most popular cryptocurrency on the market. More and more retailers are accepting Bitcoin for everyday transactions. This makes it appealing for both investors seeking long-term gains and individuals who want to make secure transactions without dealing with a third-party financial institution.
Bitcoin’s founder goes by the pseudonym Satoshi Nakamoto. To this day, nobody knows the real identity of the person (or persons) who started Bitcoin. We do know that the idea behind it was to create a peer-to-peer (P2P) currency that eliminated third party interactions during transactions, thanks to the Bitcoin whitepaper Nakamoto published in 2008.
The first sale attempt happened back in March of 2010 when a user auctioned 10,000 BTCs for $50, however, no buyer was willing to place any bids. Soon afterward, the first Bitcoin exchange was born. Bitcoinmarkets.com listed BTC for a mere $0.003. Currently, there are hundreds of exchanges and indexes dedicated to cryptocurrencies.
Early adopters are reaping the reward of their investment as the currency sells for hundreds of times the original amount. In fact, some early investors have gained over 10,000 percent earnings. That’s unheard of in pretty much every market.
Bitcoin has always been the number one crypto by market cap. Ethereum (ETH) came close to overtaking BTC back in 2016, but failed to surpass it. The event was referred to as “The Flippining”.
Bitcoin as an Investment
Bitcoin is considered a long-term, high-risk investment by many. (Even the official website alerts buyers and investors to treat BTC as a “high-risk asset.”) This is due in part to its price volatility.
Like any other commodity, this cryptocurrency’s value is based on supply and demand. When demand is high, the price goes up. As we’ve seen, BTC’s valuation can change by 10x or more in a short amount of time. Only a limited number of Bitcoins exist (21 million), making it a scarce commodity.
How It Compares to Gold and Silver
BTC is often compared to gold (XAU) and silver (XAG) as a store of value. They’re both popular among people who don’t want to use traditional currency, and they have many similarities.
For starters, both Bitcoin and gold are mined. But while gold is physically mined and is a tangible metal, BTC is mined digitally. You can’t hold Bitcoin in your hand the same way you can hold gold bullion or coin. The digital aspect of Bitcoin is part of the appeal for investors who favor it over gold. A tangible object can be lost or stolen easier than a digital decentralized currency.
Another similarity between Bitcoin and gold is their volatility. Both types of currency are seen as more volatile in price than a traditional currency, with BTC standing out as the more volatile of the two. This can be a good thing, though, as BTC tends to present more opportunities for investors than gold does.
Why Is Bitcoin so Popular?
A decade after Bitcoin first emerged on the market, it remains a popular form of currency for several reasons:
Bitcoin offers a secure way to store money and make transactions, which makes it appealing for people who don’t want to use credit cards or bank accounts. It’s traded on the BTC blockchain, which is a secure peer-to-peer network that tracks and manages Bitcoin as it’s bought and sold.
Transactions Are Relatively Cheap
In general, it’s cheaper to transact with BTC than with traditional banks, especially when you’re making international transfers. That was one of the most appealing aspects of Bitcoin when it was first introduced.
Bitcoin cuts out the middleman (i.e. banks) during transactions, allowing buyers and sellers to transact with each other directly from anywhere in the world. Unlike cash, BTC doesn’t have exchange rates. You can go from one country to another and use Bitcoin without worrying about exchanging your money or dealing with conversion rates.
How to Get Started Buying Bitcoin
The easiest way to get crypto is to buy it from an exchange. Before you do that, you’ll need a wallet to keep your assets safe (think of it as the digital version of your physical wallet). Then, go to your exchange of choice, choose how much Bitcoin to buy, choose your payment type, and store your BTC in your wallet.
You can also buy cryptocurrencies through a peer-to-peer network, also known as OTC (over-the-counter). Finally, Bitcoin ATMs are popping up around the country. They operate like traditional ATMs but are dedicated to cryptocurrencies instead of traditional money. Although there can be a small price markup, it’s a fun way to purchase cryptocurrencies on the go.
Finally, use the Crypto Pro app to track your cryptocurrency portfolio and stay on top of the market.